FUNCTIONS OF LAW

Status Quo and Change

Institutions provide the rules of the game in a society. These are the rules concocted by humans to assist them in their cohabitation. Law is an institution. One of the goals of law is to establish rules that would increase the predictability and certainty of outcomes and, thus, facilitate transactions in a society. As an economist would put it, the purpose of law is to reduce the transaction costs of cooperation among individuals or other legal entities, such as corporations and states. Transaction costs include the costs of defining and enforcing property rights and the costs of remedying the information asymmetries among parties about to enter a transaction. A vast amount of society's resources is devoted to monitoring and enforcing behavior to ensure conformity with the rules of law.

The purpose of international law is to facilitate state interaction by introducing order where, otherwise, would be disorder, anarchy, and war. The primary goal of the United Nations is to safeguard peace, a precondition for cooperative outcomes. Various international organizations and treaties have been adopted with the purpose of coordinating state interaction by standardizing expected behavior.

The pursuit of order and stability perpetuates a view of a law as an institution of the status quo. To give an example, the principle of stare decisis is explicitly endorsed in Anglo-Saxon systems but also is implicitly adhered to in civil law systems.